The union cabinet on Wednesday approved the revival of closed urea units of the Fertilizer Corporation India (FCIL) at Sindri in Jharkhand and Gorakhpur in Uttar Pradesh, as well as the Barauni unit in Bihar of Hindustan Fertilizer Corporation (HFCL).
A consortium of state - run NTPC, Coal India and Indian Oil Corp will help revive three units
"These three fertilizers units would be revived by means of special purpose vehicle of public sector units, namely, National Thermal Power Corporation, Coal India, Indian Oil Corporation and FCIL and HFCL, through 'nomination route', " Law Minister Ravi Shankar Prasad told reporters here after the cabinet meeting.
The setting up of new units will meet the growing demand of urea of Bihar, West Bengal and Jharkhand, and also help to save in subsidy on freight otherwise being incurred for transporting urea from distant western and central regions, he said.
"It will also accelerate the economic development of the region.
Apart from growth of regional economy, this unit will create opportunities for 1200 direct and 4500 indirect employment, " he added.
State - run gas utility GAIL India has planned to lay a gas pipeline from Jagdishpur to Haldia, while these fertiliser units will serve as anchor customers for the pipeline.
"Commissioning the Jagdishpur - Haldia gas pipeline is important for development of critical infrastructure in Eastern India and will have multiplier effect on economic growth of the region, " a Chemicals and Fertilizers ministry statement said.
The Cabinet Committee on Economic Affairs earlier had approved gas pooling for urea sector, which will enable these units to get gas at pooled price on its revival that will make the urea units globally competitive, it added.
The fertiliser units were lying defunct since their closure during 1990 - 2002.
The government last year approved revival of these three units through the "bidding route".
However, the bidding process could not be carried forward due to receipt of only one application each against 'Request for Qualifications' for revival of the Gorakhpur and Sindri units, " the statement said.
As per official data, India's annual consumption of urea is 32 million tonnes, of which 24. 5 million tonnes is produced indigenously and the rest imported.
To increase domestic production of urea, the government has also approved the revival of Talcher (Odisha) and Ramagundam (Telangana) units of FCIL through the "nomination route, " the statement added.